China has a few problems too
A day after the Chinese central bank cut interest rates by 108BP and the World Bank reduced its 2009 growth projection to 7.5%, there were a few problems in the country. UK Telegraph:
In recent weeks, a series of riots across central and southern China have flowered as disgruntled employees aired their grievances at the downturn. Today, around 500 protesters rioted at the Kai Da toy factory in Dongguan in the Pearl River delta, flipping over a police car and trashing computers in a dispute over payoffs to 80 fired workers. Tens of thousands of factories across the region have already shut their gates.
Yin Weimin, China’s Social Security minister, has revealed that employment is the Communist Party’s number one concern in the downturn and said the “situation is critical”. Unemployment is expected to rise from 4pc to 4.5pc by the end of the year and anecdotal reports have suggested that 3m people have already been fired in the industrial province of Zhejiang alone.
Two major provinces, Shandong and Hubei, have already responded by banning companies from firing staff without permission from the government.
Another data point from the FT: “the mayor of Shenzhen, China’s largest export centre, said factory closures had claimed 50,000 jobs in the city so far this year after 682 factories closed or stopped production.” Pretty grim, even more so if China was exaggerating growth on the way up.
November 28th, 2008 at 11:47 pm
Will the Obama Stimulus Plan help China more than the previous Bush Stimulus plans? How would they compare to the previous Clinton Stimulus Plans? What is it about Obama’s Stimulus plan that makes it materially different than the previous Bush or Clinton stimulus plans? Is the main difference the “Quality of the Minds” behind the new stimulus plans? Would Obama’s stimulus plan be his, or would it be Clinton’s second?
Has the thinking changed, or has only a few new faces been added? Can you spot the new face?
Previous stimulus plans attempted to “kick start” the economy with the thought that we would decelerate at a later time when conditions were better. For better or worse, we are now decelerating. Let’s see where the ride takes us. Loading up public debt on prudent taxpayers will not stimulate consumption.